Unemployed home owners will be allowed to suspend or reduce mortgage payments for as long as a year under a new policy announced by mortgage finance firm Freddie Mac on Friday. The new rules take effect on Feb. 1.
Freddie Mac will give mortgage servicers the authority to provide six months of forbearance to unemployed borrowers without prior approval, and the agency can approve an additional six months of forbearance after that. Homeowners are still responsible for paying off their full mortgage plus interest after the forbearance period ends. The Federal Housing Finance Agency (FHFA) called for the extension, in the hope it would keep more families in their homes. Freddie Mac previously allowed lenders to grant up to three months of forbearance with no payment, or six months at a reduced payment, without the firm’s prior approval. Delinquent borrowers with Freddie Mac owned- or guaranteed-mortgages who are in an existing short-term forbearance plan can be evaluated for an extension under the new policy. If you are unemployed and need financial help, contact your lender or the Homeowner’s HOPE Hotline, 888-995-HOPE.
